Personal Tax Residency in Cyprus

Efstathios K. Efstathiou > International Business Company IBC > Personal Tax Residency in Cyprus

Personal Tax Residency in Cyprus Company

Efstathios C. Efstathios LLC creates a leniency for its clients who are resident of Cyprus for taxation on all income received from domestic or international sources (personal tax residency in Cyprus). Taxes are levied against some income obtained from sources in Cyprus by non-residents of Cyprus.

Our lawyers calculate days entering and leaving the Republic of Cyprus as follows:

Cyprus considers the day of departure as a day spent outside the country.
Upon landing in Cyprus, the day is regarded as a day within the nation.
One day of residency in Cyprus is counted when you arrive and leave on the same day.
A day out of the country is counted when leaving and returning from Cyprus on the same day.
Paying foreign taxes can reduce your personal income tax liability.

Efstathios C. Efstathios LLC makes “tax residency” in Cyprus easier and takes advantage of the favorable tax laws there, such as the 12.5% corporate tax rate, the dividend exemption, and numerous other tax breaks.

Contact Us & Book a Free Consultation with Our Professional Lawyer!

At Efstathios C. Efstathios LLC we are devoted to providing you with the best experience.

Contact us to book a free consultation session with us today.. Call us at (+357) 22 755109 and get a proper legal representative now.

FAQs – Frequently Asked Questions for Personal Tax Residency in Cyprus

What is Individual Tax?

Tax requirements based on an individual’s yearly income who is a tax resident of Cyprus.

Who has to pay taxes as an individual in Cyprus?

Any person who stays in Cyprus for more than 183 days during a calendar year is regarded as a Cyprus Tax Resident and is consequently subject to income tax. Under other conditions, a person may also be regarded as a Cyprus Tax Resident in accordance with the more recent 60-day rule.

On what income is the tax resident individual taxed?

A resident of Cyprus is subject to tax on his worldwide income.

What is the tax-free amount on income tax in Cyprus?

In Cyprus, income under 19.500 € is not subject to tax.

What is the income tax rate for individuals?

If my income overcomes the tax free amount, how does the tax rate apply? Is the tax calculated with 20% of the whole amount?

Any income in excess of 19.500 € is subject to the same tax rates as those shown in the table above. For instance, if your annual income is 20.000, the 500 Euros you earn will be taxed at a 20% rate.

Do income tax exemptions apply for individuals in Cyprus?

Yes, many income tax exemptions apply. Check the exemptions table below.

Exemptions of income tax for individuals

Type of Income	Exemption
Dividends.	Total Amount
compensation from any employment performed in Cyprus by a person who did not reside in Cyprus before the employment. Exemption is applicable for 17 years as long as the annual salary is greater than €55,000.	50% of the remuneration
Compensation from any employment performed in Cyprus by a person who was not a resident of Cyprus prior to the employment, for a period of three years starting on January 1 of the year after the work began. For employment that begins on or after January 1, 2012, the exemption is applicable for a period of five years, beginning with the tax year that comes after the year the job first begins, with the last qualifying tax year being 2020. This exemption cannot be used in addition to the 50% exemption for employment income that was just described.	20% of the remuneration with a maximum amount €8.550 annually
compensation from salaried work performed outside of Cyprus for an employer who does not reside in Cyprus or to a foreign permanent establishment of an employer who does.	Total amount
Profits from the sale of securities.	Total Amount
lump sum payment made as a retirement bonus, a pension conversion, or as compensation for harm or death.	Total Amount
Capital sums accruing to individuals from any payments to approved funds (e.g provident funds).	Total Amount
Profits of a foreign permanent establishments under certain conditions.	Total Amount

Income tax deductions for individuals in Cyprus

Certain expenses are written off against the yearly tax.

TAX Deductions on the income of individuals:

Type of income	Deducted from income
Donations to approved charities.	Total Amount
Since January 1, 2017, any amount spent each tax year, directly or indirectly, on certified innovative small and medium-sized businesses.	The amount of the discount that was not used can be transferred and claimed over the course of the next five years, up to 50% of the taxable income determined prior to this deduction (with a maximum deduction of €150.000 per year).
Contributions to trade unions or professional bodies.	Total Amount
Income from property rental.	20% of rental income
Contributions for life insurance, medical funds (maximum 1.5% of compensation), pension and provident fund contributions (maximum 10% of compensation), and medical funds (maximum 7% of insured amount) are also required.	Up to 1/5 of the chargeable income
Loss for the current year as well as past years (for individuals required to prepared audited financial statements, current year losses and losses of the previous five years only may be deducted)	Total Amount

Are there any additional forms of taxation in Cyprus?

Yes. If the non-domicile status described in the tax incentives tab is not granted, defense tax will be paid to dividend, interest, and rental income.

Does an individual need to pay for social securities in Cyprus?

Yes, in addition to his net compensation, every employed or self-employed person is required to pay social security. When there is work, the employer also pays a portion of the social security department’s budget.